An Asian Union? Not yet

HONG
KONG The inaugural East Asia summit in Kuala Lumpur that
ended on Thursday can be seen as a significant setback for Chinese
diplomacy. That may seem a surprising conclusion given the way that
Beijing has been enjoying the run of Asian diplomatic play for at
least the past three years.

But instead of
confirming China's position as prime mover in the new emerging Asia,
the summit emphasized the misgivings that other nations have about
its potential and ambitions.

By the same token, the
absence of the United States was a reminder of just how lonely some
countries would feel were its markets and its fleet no longer there
to underpin their security.

The concept of an East
Asian block, an equivalent in economic and trade terms to Nafta and
the European Union, remains valid in principle.

Intra-regional trade is
already on a scale that would justify more cohesion on exchange
rates and trade. But Kuala Lumpur showed the absence of the trust
and political will necessary to take meaningful steps in that
direction.

China's snubbing of
Prime Minister Junichiro Koizumi of Japan may have gone down well at
home and with the Koreans. But the emphasis on past grievances
showed how xenophobia lurks very close to the surface of all three
major East Asian players.

That alone is
disconcerting for the southeast Asians who have little interest in
these issues and are more concerned with forging ties than asserting
their national identities.

Focusing on unpleasant
history is also no basis for the trust needed to build a regional
economic group.

It does not help that
China makes scant effort to disguise its belief that it is the
natural leader of the region, destined to play the role that the
United States does in Nafta.

China's pursuit of a
bilateral trade pact with the 10-member Association of Southeast
Asian Nations also detracts from the wider concept of an East Asian
regional grouping.

Following China's
example, Korea and Japan are making similar deals. All this is in
the name of freer trade and regional cooperation.

But the reality is that
these bilateral agreements, if they are to be anything more than
pieces of paper waved by politicians, will likely divert - not
create - trade and produce discriminatory provisions that set East
Asian nations against each other as well as against the United
States and Europe.

Concern about China's
ambitions was evident in the invitations to India, Australia and New
Zealand to take part in the summit.

Australia's invitation
was significant, given the unpopularity in Asia of Prime Minister
John Howard's slavish following of U.S. policy in the Middle East.

India's attendance was
significant in that it does relatively little trade with East Asia
and has a more protectionist outlook.

But now that they have
their feet in the door, these outliers are unlikely to yield easily
to the concept, as expressed by Prime Minister Wen Jiabao of China,
that the group should be "led by the East Asian countries" - Asean
plus China, Japan and Korea.

The bigger 16-nation
group is certainly unwieldy. Former Prime Minister Mahathir bin
Mohamad of Malaysia is right to see it as a dilution of his concept,
enunciated as far back as 1991, of a strong, focused East Asian
group that would exclude the Australians as well as the United
States. (At the time India was too inward-looking to be even
considered).

But the reason for this
dilution is very clear. The northeast Asian economic powerhouse
lacks the political cohesion to build a community.

China's ambitions are
too transparent. Japan is at best nervous and at worst xenophobic in
its own responses to China's focus on the past. Korean nationalism
is in a league of its own.

As for Southeast Asia,
Indonesia, will ever be suspicious of China's ethnic as well as
territorial claims. Singapore prefers to stay close to the United
States and Australia - and sees merit in links with India.

China, meanwhile, also
needs Australia, if only for its resources. China's claims to Asian
leadership will ring hollow while it is more dependent on the U.S.
market than its neighbors, and while its success in exports is
largely the product of foreign technology and investment. Japan and
Korea will not sacrifice their global commercial success in pursuit
of nebulous Asian groupings.

In short, the KL summit
has been useful in showing up fault lines and cross linkages across
Asian and the Pacific.

The outcome does not
suggest future conflict, but it is a reminder of the importance of
the United States to Asia and a reminder that prosperity must
continue to be driven by pragmatic, trade-oriented policies which
set aside historical and ethnic issues.